From CIO to CEO: TCW’s Katie Koch on running a $200B asset manager
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Welcome to another episode of Goldman Sachs Exchange's Great Investors. I'm Alison Mass, Chairman of Investment Banking at Goldman Sachs' Global Banking and Markets Business, and your host for today's episode. I'm thrilled to be speaking with Katie Koch, the President and CEO of TCW, a global asset manager with more than $200 billion in assets under management.

Prior to joining TCW as CEO in 2023, Katie spent 20 years with Goldman Sachs, where she was a partner and most recently served as the CIO of the public equity business in our asset and wealth management business. I'm so excited to speak with Katie about how she's leading TCW, building the culture, and navigating the firm through a period of rapid change for the fixed income asset class.

Katie, great to have you on the program and welcome back to 200 West. Thank you. I'm so excited to be here always. So some of our regular listeners may remember Katie was one of my co-hosts for this podcast, which Katie and I first started in 2020 as a way to hear how leaders across the financial services industry were managing and investing through the pandemic.

So Katie, how does it feel to be on the other side of the mic as an interviewee as opposed to an interviewer? Well, first of all, I always love being back at Goldman Sachs. I have to say that when we started this and you, it was your idea, but you were kind enough to ask me to participate, which ended up having huge benefits I want to talk about.

But we were like on our laptop Zooms and now you guys have this whole, it's very Goldman. Just keep taking it up to the next level. We try. We try. It's great to be here and great to have this experience. Thank you for having me. I would say that I prefer being the interviewer instead of the interviewee. Sorry about that.

that. Not today. Not today. But I do like, I just really loved that experience in general because of course, when you're talking, you're not learning. So it was great to have this opportunity to go speak to all these smart, incredible people and really listen and digest their philosophy and their process. And that was a real highlight for me. So thank you for involving me in that. And I was thinking about it on the way here.

And I met so many great people and interviewed so many extraordinary people through that process. But there are three that really actually had a massive formative impact on what I've gone on to do with leading TCW. So when you and I did this, I had the opportunity to interview Scott Besson, who, of course, is the CIO of Key Square Capital, now obviously the Secretary of Treasury. Great guy to know when you run one of the world's largest fixed income shops. Certainly.

I got to know Jean Hines, who is the CEO of Wellington, also a mother of four kids like me. And she became really someone I reached out to for advice when I was considering this opportunity and someone that I built a great relationship with since I started leading TCW and been able to talk a lot about the job and also the family aspect with her, which has been very personally fulfilling. And I met Howard Marks, who actually spent a formative part of his career at TCW and

And he and I met through this process. And then we've gotten to know each other and get breakfast or lunch once or twice a year. And so he's given me great perspective on it. So in life, you don't know how these things are going to work out. But I'm so glad you asked me to do it. And it's an honor to be back. And honestly, once I tick through those list of people, I'm wondering why am I here? I don't belong in that long list of people. But it's an honor always to be back. So it's a lesson. Next time I ask you to do something, the answer will be yes. Yes. Well, it always was yes. I

Anyway. All right. So let's start with your transition from being CIO at Goldman Sachs Asset Management to leading TCW. That's a big change. And we were lucky to have you at Goldman Sachs for 20 years. But share with our listeners why you made that move.

Sure. So first of all, I am the lucky one. I was probably one of the least qualified people ever hired by Goldman Sachs. Not true. But really, they took a chance on me and there's no limits to my gratitude for that experience and the 20 years I spent here. And we should talk more about that because it fully equipped me to do this job. And I'm very grateful for that. But for me, I was in asset management when I was at Goldman Sachs. And it's an industry I love.

I love investing and I wanted to try it in a different context. So I wanted to do it in a place where we were in the monoline business of just asset management, ideally do it somewhere that's privately held, which we can talk more about. And this opportunity came along and I thought, you know, I really love to set strategy and build teams and build cultures.

And this was a great opportunity to do that. And I felt like I said, I mean, you're never fully ready or fully prepared, but I felt ready enough to take the leap to do it. And it was a very good decision for me and for my family.

So talk a little bit about how you adapted from being an investor to stepping into a CEO role. Right. So there's part of it that you are very prepared for as a CIO becoming a CEO. And then there's another part of it where you're not as much. So I guess I'll split those apart and walk through them. One thing that you bring, and I think makes you better at running an asset management organization if you have been in the investing seat, is that you bring a lot of

empathy and understanding to the job because it's a really difficult job. I mean, you are trying to predict the future under circumstances of extreme uncertainty, and you're trying to prosecute continuously and consistently a philosophy and process that by definition is not going to work every day and not going to work every quarter. And so it can be really trying emotionally and psychologically.

And I think having gone through that experience, it has helped me be a better leader of an investing firm because I'm able to understand part of the psychology of what people are going through and to support people through those difficult periods. Because in investing, it's usually...

the point of maximum psychological pain when you get to that inflection point and things revert and your philosophy and process will work again. And so I feel that I got trained well in that and that I've been able to bring that to the job. The part that's different is when you're investing, you make capital allocation decisions, obviously, in a portfolio context.

Of course, as a CEO, it's one of your most important jobs is to make capital allocation decisions, decide what businesses to support, what new business lines to enter, et cetera, but you also have to execute. I just think back to the investing days and sitting across from CEOs and asking them a lot of questions and scrutinizing their plans. I don't think I fully appreciated how hard it was to take the vision and the strategy to execution.

And so as a CEO, you're responsible for that in the operational part of the business. You're responsible for that execution in a way that you didn't fully understand as a CIO. And I have come to understand that, but I think and get better at it. But the bringing of those two things together, I think, are the skills that you need to run a successful asset management organization.

So I'd like to dive into TCW's business. The firm was founded in 1971, has a rich legacy in fixed income. Talk about how TCW has evolved and what does it look like today?

So we're established over 50 years ago and have been independent privately held for that period. There's actually just not that many asset management companies in the world that have that long of a tenure of existence and continue to be independent. So it's a real privilege to have the opportunity to lead the platform.

It was started actually by a gentleman named Robert Day, who was a scion of the Keck family. And the Keck family is very well known in America as being the founders of Superior Oil, which was the largest independent oil and gas company in America until it was sold to Mobil. And then he was a next generation individual and was able to start and lead a very successful company in a totally different industry, which, as you know, is pretty unusual in and of itself.

and interesting. He unfortunately passed away last year, but I did have the chance to meet him and have lunch with him before I started. And he said something to me that really stuck with me, which is, you know, remember you're in the investing business and allow it to compound over time.

And investing, this concept of compounding is very important. That's what Albert Einstein calls the eighth wonder of the world and the people that understand that will earn it and the people that don't will pay it. I mean, I'm a big believer in all of that and thinking about life and also investing. And what he was trying to say to me is that there is a great heritage here. Don't mess it up.

No pressure, no pressure.

The fact that we have very differentiated philosophy and process anchored in value investing, which is very much enabled by the fact that we're a private company with a long horizon. So respect and keep all of those things that are great, but evolve the platform for the fact that the future is changing in terms of new vehicles for us that would be exchange traded funds and liquid markets, which we didn't have before, and expanding our footprint and alternatives as that grows. And I keep that in mind everywhere.

every day how do we respect the heritage of this company while evolving it for the future yeah so speaking of evolving under your leadership the firm has made a big push into alternatives and private credit talk about what's driving that and the opportunities you see there

Sure. So when you gave my title at Goldman before I started this, so I ran an equities business. I, for many reasons, was not maybe the first person people would think of to run TCW. One is that it's largely a fixed income shop. And so I had a lot to learn. I still do. But one thing I was able to bring to the role that I think was valuable is the pattern recognition of how asset classes evolve and get disrupted over time.

And when I ran the equities business, I understood that the public equity market shifted dramatically over the last 20 years. You saw it from the other side because you, of course, led financial sponsors. So you saw private equity taking share from public equity. And in the United States, there's now 50 percent less companies, publicly listed companies than there were when I started in this industry.

And I just had some intuition and some pattern recognition that we were in the early stages of that happening in fixed income. And that pattern recognition led me to say, we as a group, we need to understand that the landscape is shifting and we have to do more to be relevant in the fixed income markets and do more in the private markets.

So, you know, big picture, we need to be relevant ultimately to the borrower, to the CFO. And it's actually even more complicated and in some ways more important than it is in

equity markets for the following reason. If you're a CFO on the equity part of your capital structure, you have one decision to make, be public or private. But in the debt part of your capital structure, you can be both public and private at the same time. You can even be IG and high yield at the same time. You can lend against corporate cash flows. You can

lend against securitized assets. You can be much more creative in that part of the capital structure. And for us to stay at the forefront for clients, to be relevant to clients, we have to be relevant to the borrower. And that really is the philosophy from which we've pushed further into alternative credit. So it's very popular to be an alternative credit now. So I really want to make the point that we are not tourists in alternative or private credit. We actually have one of the longest track records in the industry in private credit, but we are putting more emphasis on it now.

So I am simply building on a strength that already existed and putting a little bit more focus on that and really coming at it from how do we stay relevant to the borrower, how do we stay relevant to our clients. So how are institutional investors thinking broadly about portfolio construction and the mix of public and private asset classes today?

I do think this is going to evolve a lot. And I think we're going to orient more towards people looking for holistic solutions versus being able to sell individual products. And I've just seen a pickup in the last couple of months

both of sovereign clients and of pension funds doing two things. One, giving us a return target and saying, I don't want to deal with ABF and private credit and ABF Mez versus IG and the CLO business. Like you guys do that. I'll give you a return target. You put it together in a way that will hit my quality standards and my return target. So there's more of those conversations happening.

And then if you just take one of the dedicated buckets like securitized investing, people wanting to look at the best opportunities across public and private to build a securitized portfolio. And then even within private credit, and by here I mean traditional high yield private credit, private credit has...

become bigger than the high-yield as an asset class, but we have people saying in the non-IG space, you mix together private credit, traditional high-yield, and the CLOs, bank loans, put all that together and build me a non-IG slash high-yield portfolio. So I think the clients are putting the work back on us, which is good, and that's what we're here to do. And they're asking us to come up with more holistic solutions versus just approaching them with individual products.

So let's take a step back and talk about the macro environment. And I wonder whether that change is a result of this environment we're in. I mean, we're recording this podcast at a time that's truly extraordinary. Markets are volatile and geopolitical tensions are high. And as you're adjusting your investment strategy in this environment, how much of that is driven by what's going on out of your control?

This is a very volatile environment. I would also say this is our market. This is great for us and for our clients because we have heightened volatility, heightened uncertainty. It's great for active management. And across the platform, we're generally value investors. So put simply, where we shine is when we can step up

and provide liquidity when other people can't or won't. So we came into this year with a lot of dry powder and a lot of cash. That is true in our private credit business, and it is also true in the way we invest in public fixed income.

So in private credit, the last couple of years, a lot of capital came into the space. A lot of what we call optimistic lending happening. That's not good. You don't want to be an optimistic lender because you're just trying to get your money back. So that's not a way to get your money back is to be overly optimistic. And we tend to have much lower levels of deployment in those environments. And so we came into this year with a lot of dry powder in our private credit business.

And then on the public side, we were at our maximum where we have portfolios that are cross sector, we were at our maximum underweight for credit. Now, we're not geniuses, we don't have a crystal ball, but we have a valuation discipline. And very simply put, when we looked at the valuations being demanded both in private and public markets, the forward returns were negative. And in that environment, we won't allocate in size to those asset classes for our clients.

And so that set us up well for this year. We actually had one of the busiest trading days in the history of TCW two weeks ago. And we are now starting to take advantage of these dislocations to buy credit for our clients. So we are saving for people's retirement. We do not wish a recession or the human impact it has on people. But again, we're trying to help people maintain and build wealth. And actually, this is a

pretty good environment for the way we invest to do that. And we will continue to stick with that philosophy and discipline. And I will say to you, one of the most important things to have in this industry is to have a process and a philosophy as well as experience of getting things wrong. Those are like the two most important things to have. Discipline,

and a lot of experience, and we bring that. And these environments are very fruitful for us to generate outsized returns for clients, and that's what we're seeing so far year to date. So in addition to my day job, I lead the firm's Office of Alumni Engagement now, as you know, and we recently conducted an analysis and found that more than 600 Goldman Sachs alumni are in the C-suite of leading companies.

And included in that number are more than 180 CEOs, including you. So thinking back to your Goldman Sachs experiences, were there any influences or experiences in particular that shaped the way you lead today?

That's pretty extraordinary. It is extraordinary. And what I take from that is that Goldman Sachs is a place that manufactures talent. And I said at the outset that I was one of the least qualified people hired here. And it's not, I'm not trying to sound like

cool or overly humbled by, I truly was. I was a literature major. I had absolutely no idea what I was doing when I started. And the only thing I had to offer was hard work and diligence. And I did offer a lot of that, but that's all. I mean, that's the only thing I could do because I didn't know anything.

And then you think about it, and 20 years later, I have the privilege of leading my own company. And I think it really does say a lot about Goldman and its ability to take in people that are, you know, hopefully, I would say, intellectually capable in my case, in earnest, and turn them into leaders. And that's actually remarkable. So congratulations to you guys on that track record, or to us, I guess, as part of the alumni group. Once a partner, always a partner. Yeah.

Thank you. And then you, yeah, so you're asking, did I learn things here? I mean, I learned everything here, right? Because I knew nothing when I came in. So what are things that I learned beyond you have to work really hard, which in and of itself is a very important lesson. I certainly got to move around a lot here. And that was very powerful. And what I mean by that is that I worked across multiple cities, countries.

mostly in asset management, but I had the opportunity to run a number of different businesses in asset management from the multi-asset space to equities. And you just learn a lot about different asset classes, about how clients approach problems, about how you can help them. And this is a place, at least it was for me, that if you had the intellect and you put in the hard work and you put up results,

There really was no limit to the opportunities that you got. So I feel like the mobility helped me a lot, prepare me for this job. I would say I built incredible relationships here. So of those people that you mentioned, many of them are my friends. I know in the industry, it's the best phone-a-friend network on planet Earth because either I kind of can figure out what to do through pattern recognition or I have a big Rolodex of people that I can call on to do that.

you being one of them. And on the relationship part, I did learn from you and other people here how to build relationships.

And it's very important. I want to spend just a second on that because I feel like this next generation, I sound like an old person saying that, but the next generation of people doesn't have all the instincts in doing that, which is that I was taught with clients and also internally that you needed to not be extractive to invest in those relationships and what you can bring to those relationships and make the withdrawals before you take deposits. Right.

That was a very powerful lesson for me. And it allowed me to build great relationships at Goldman. And also after I left Goldman to now these people running companies, countries, central banks, et cetera. And they're people I had good relationships with because I came to at first with like, what do I have to offer? And I even remember the first time I met you, I said, that woman's amazing. And I love how she's running her business. And there was a personal part of you that really appealed to me with balancing that with your family.

And I wrote you a handwritten note to tell you how much I appreciated meeting you. And I really reflected on what could I bring to Allison that would make her care about me or talk to me or meet me. And we did some work on your clients, remember? Because I was in the

business and I said well maybe her clients would want to hear what is an investor on the public equity side think about this company and that's how I approached you and convinced you to care about me right and to be my sponsor a mentor but that was such a powerful lesson for me because I thought about what I could do for you even though I was very junior at the time that would be of any value before I said what can Allison do for me now in reality you've done a

a lot more for me than I've done for you, but I started from the place of what can I do for you? And so I learned that here and that compounding of relationships and the connecting of people and not being extractive and actually thinking about what you can put out into the world before you take something from it is a lesson that I learned here. Also in that selfless bucket, I remember something I think about at least once a week

was our mutual friend, Steven Scher. I went to him and I told him, I'm sure I had this conversation with you too, at one point how ambitious I am and I want the next job. And it was me, me, me, me, which is extremely painful, by the way, to hear when you're a CEO. So now I understand it more than I did at the time. But he gave me the advice, which is like, what is the industrial logic of what you're asking for? Think about why it's good for the company and the clients

and then frame whatever it is that you want in that because if you're trying to win for the company and the clients, you will ultimately win for yourself. And you gave me versions of that advice too over time, but that really helped me succeed at Goldman and it's helped me coach people at TCW. So that was a big part of what I learned. And then finally,

We had a great, and I'm sure still have, a great feedback culture here. And I had to really work on that when I came to, and we are building an amazing feedback culture where people are willing to, we create the psychological safety to give people feedback because you want them to win and you want them to be more effective. And that I think is very positive for any culture and a lesson that I took from my time here.

So before I ask you more about the culture you're trying to build at TCW, because I want to hear about that, you're helping me with my clients when you were CIO at GSAM, carries on today. So you should be proud that your team who worked for you and with you then continues to do it, and not just with me, with a lot of the senior bankers. And it's very valuable and value add to the CEO clients. Yeah.

Yeah, I love that. And I had such an extraordinary team there. I want to say one last thing, which is that when I left to do this job, I was I'm 44 now is 42 at the time. And so you learn how to run people problems process at scale. Right. You get trained on that really well at Goldman. And I honestly could have done with another few years, even maybe a decade of learning from David and John and you and other people. I left a little bit, you know, early in some respects, but.

And so I talked about the phone-a-friend network as being important, but one thing that you connected me to that's been helpful is you introduced me to Adina Friedman, who's the CEO of Nasdaq.

And I have the privilege now of serving on the Nasdaq board because of that introduction and because of the fact that we at one point were shareholders and we had that conversation with her. How do you evolve from being rated like an exchange company to a technology company? And we engaged in that discussion, got to know each other. And then when a board seat opened up, she thought of me and I was able to take advantage of that opportunity.

And she's formidable. That's one of our favorite words, right? And she truly is. And I didn't do it for that reason. I did it because I thought I could add value to the shareholders of NASDAQ. And I will, I'm sure, at some point. But actually, one of the biggest benefits to me is to see an executive, how they manage their board, how they manage their senior leadership team. And I'm so fortunate to still get that opportunity every day. It's something Goldman created for me, but I get that opportunity and those learning experiences even in this role.

Because at TCW, there are a lot of people that are a lot smarter than me, but there's actually not that many people that have more executive experience just because of the type of business that we're in. So that ability to learn from Adina on a continual basis and see someone doing it at the zenith of their career and at such a dominant position in their industry is really a gift.

That's a great relationship story building. So let's go back to the culture you're trying to build at TCW. You talked a little bit about the feedback part of the culture. What are other things that you're focusing on in the culture there? Number one at the top of the list is integrity. We are going to get investment decisions wrong. That's part of the business. It's a tough business, and we will get some of those wrong. And that's not just forgivable. It's understandable and expected.

What is not tolerated at all is any sacrifice of the values or the morals or the way we show up for clients. Because every company is built on trust, but none more than the investing industry and asset management. So integrity is at the top of the list, the bond that we have with each other and with our clients. Second is humility. As I've said for many years in this industry, you're either humble or about to get run over. And that is one of the most important things

qualities of any investor. The third is intellectual curiosity. And so we have already a lot of intellectually curious people at TCW. We're pushing people to be curious about other parts of the market as we break down these verticals and work more together, which leads me to the point on collaboration. We talked about earlier, as the market structure shifts, we have to be able to be nimble and work together more, for example, across public and private markets.

So that's a big part of what we're also building. And if you take all of those things together, that's where you build that environment of psychological safety or interpersonal risk.

It's the humility that you get from being willing to learn from other people. But you have to have the other attributes first. And then you will build that environment of psychological safety. And that is when you get to a feedback culture where people are really willing to tell each other what they feel honestly in a professional way to push each other to be better for our clients. So I'd like to rewind the clock to when you were first starting out. You grew up in suburban New Jersey. And I know that you grew up in a very close-knit family.

So talk about some of the lessons you've learned from your parents. I did have this incredible advantage of having and continue to have such a great family. And I'm very close to my parents.

My dad, as you know, unfortunately passed away about a decade ago. But both my dad and my mom left me with important life lessons that I pretty much draw on every day. So there are two simple ones. I'll spell them out. From my dad, it goes back to integrity, which is we do the right thing here in this family. Not the expedient thing, not the popular thing, not the easy thing. We do the right thing.

And when you're running a company or team, whatever construct you want to say, life can get really complicated and you have to make a lot of decisions. You want to have that North Star because it makes it easier to get to the right answer for the clients and for the people and for the company. And we don't get every decision right, but we are coming at it. And I've been trained from when I was a very young child to come at it from

what's the high integrity, what's the right thing to do here? And I really credit my dad with that. And it just, things that might think, people might say, wow, that must have been a hard decision. You think, no, actually, it's really easy. Because it's inside here. Yeah. And you do it for the long term too, which is tied to that. The second thing for my mom, I was a very earnest person.

overachieving child. Shocking. Very shocking. I don't want to say that as that came out wrong because that's saying it like I'm high. No, it's not. No, it's not. But not that I because everyone has a benchmark, but I was keeping my benchmark low. So I was overachieving a low benchmark because I wasn't really pushing myself because I didn't want to fail. I really had

a real aversion to failure. I wanted to be successful at everything I tried, so I would only try things that I knew I would succeed at, which is not actually a way to set yourself up for success. And my mom knew that, and so she really pushed me to do more, and she asked me this question that I think about before I ever make a big decision, which is, "What decision would you make if you knew you wouldn't fail?"

You can't use that to run portfolios. You need a different risk assessment for that. But in your own life, you should be pushing yourself always to ensure, I think particularly for a woman, that you're not held back by a fear of failure. And you are going to fail. I mean, I failed at a lot of things, but that's part of how you get to where you're going. And-

Those two questions, what is the right thing to do here and what would you do if you wouldn't fail, really were very, very impressionable on me and I think have helped me a lot in life. Yeah, those are great lessons. So for college, you went to Notre Dame where you studied economics and literature. And I know you're very connected with the university. You sit on the university's board of trustees and on the advisory board of the Notre Dame Institute for Global Investing. So talk a little bit about what the school means to you. Well,

Well, it's obviously the best school in the United States of America. And my husband went there, so I kind of agree. Go Irish. And you're going to come out this fall to watch us beat USC, which is very exciting for me now that I live in L.A. So there's a lot I could go on for a long time. So I'm going to keep this short. I think it helped me with two things.

One is that it is a place because it's religious and has a Catholic identity that teaches you to believe in something bigger than yourself. Not that you have to do that through Catholicism. There are many ways to do that, but that is a good way to look at the world is that there are powers bigger than yourself and that you're building towards something that's more than just you.

Whether you're thinking about that from a faith perspective, whether you're thinking about that from your family or running of a company, it's a good orientation to just believe in something bigger than yourself.

And I really try and think about that with people we hire too. Is this someone who can contribute and believe in something bigger than themselves? And that was something I got taught to do at home, but also at Notre Dame. And the second is that it's a mission-driven school. And I didn't fully realize this till I've actually, because you mentioned I was on the board. Now that I'm on the board, I've met the whole executive team and I've actually gotten to know them very well and they're extraordinary. So all of them could do these jobs at Fortune 100 companies, but they choose to do them in South Bend.

for Notre Dame. Now, why? Because they believe in the Catholic mission of that school. Now, I'm not changing TCW into a Catholic organization. That's not where this is headed. But it did make me realize like, wow, when people believe in the mission, tied to believing in something bigger than themselves, but really believe in the mission of what they're doing, you can extract incredible results from people and you can attract extraordinary talent.

that identifies with that mission. So I'm spending time on that. I'm thinking about how do we better articulate that for our industry and for TCW. And we're not going to get to the point of the Catholic Church, obviously, but even if I could capture a little bit of that, I think it would be transformative for the way we speak to our clients, the way we manage our talent and the way we attract our talent.

So you mentioned earlier that you have four children and what you didn't mention is that they're all under the age of 10. What are some of the lessons that you're hoping to pass on to them? The number one thing that my husband and I talk about is resilience. So life is really tough.

It's hard. And we want them to be able to persist through the setbacks. And there's that Maya Angelou quote to, you know, experience the defeats without being defeated. That's what we spend the most time on because, I mean, you know, too, you went through the same thing on the East Coast, but we can create very privileged and sheltered lives for our children. And we can solve so many of their problems and stresses. And in fact, I can do more of that if I wanted to do for my kids than my parents could do for me.

but we're really setting them up for failure if we do that. And my husband went to West Point. He went through multiple deployments. I worked at Goldman Sachs for 20 years, which was amazing, as stated, but not always easy. We could agree on that. Which was tougher. Yeah. But there are setbacks, obviously, and it's tough and it's hard. And by the way, running a company, you're mostly dealing with problems, right? So we talk about that, which is how do we instill some friction and make them understand that life is not always easy?

And, you know, it's interesting, you know this about us, but we moved to L.A. So I have these four kids. They're amazing. Have a great job at Goldman Sachs. I took the personal risk and my husband was so supportive of leaving Goldman, taking a new job, moving the family across the country. And I felt really guilty about doing that. But we did it. I was very proud for them, how they adapted. So that in and of itself builds some grit and resilience.

And then we moved to the Pacific Palisades. And as you know, we, our community burned down in January of this year. And I wouldn't wish that upon anybody, obviously. It was obviously very difficult to go through. For me and for my kids, they were displaced, not just from their home, but their school. And I would say 80% of their friends lost their homes. So it was a really tough experience. And again, we would not wish that upon anyone. But my husband did...

quickly, you know, say to me, but we're here. So they get to go through this tough thing, but we're going to make sure that they're okay. And we have talked about the fact that you have to have these setbacks to get forward in life. And that helped me

It took some of the stress out of the personal stress out of that experience for me. Like I had done something to fail my family by dragging them across the country and then having this horrible thing happen. It doesn't change that it was horrible, but it helped me frame it as this could be a growth experience for us.

And I think it has been, actually. And I don't want to be Pollyannish about it, but our kids have seen that bad things can happen to you, that you can come together and that you can survive it and that you are able to move forward. And I think that's a really powerful lesson for them. And you'll appreciate like even on a micro scale, like one thing that happened in the middle of this is my daughter wanted to try out for club soccer.

And we knew she wasn't going to make the team. I hope she doesn't listen to this podcast. She will. Just so you know, she will.

Maybe 10 years from now, but she will. But we knew that that was unlikely. And I said to my husband, let's protect her from this experience. Like her community just burned out. She's unlikely to do this. And he's like, no, it's OK. We're going to let her do it. She'll either make it or she won't. And she'll have either it'll be great. She'll make the team or she'll have this experience of failure and we'll be there for her and we'll help her through it. Because by the way.

It's going to happen a lot. Winning is easy. Losing is not. But losing is the most important thing, right? In investing or in life.

So she did it and she did not make the team and she did survive, obviously. And I think it was a good experience for her and it has not stopped her from wanting to try to do new things. That's great. So we tried. That's what I would say we're the most intentional about, which is helping them. Again, winning is easy. How do we help them lose? How do we help them build resilience? Because you've managed thousands of people right over the years. Don't you think that's something that sets people apart? One hundred percent.

And that's what we want for them. And I think school can teach you some of that, but I think it's down to the parents to do that. So that's...

That's the number one lesson. Doesn't make you their best friend all the time, I'll say. You have to be willing to sacrifice kind of that part of it. And that is hard because, you know, we have limited time with our kids, right? So actually the easiest thing to do would be to remove all the friction and that limited time that you have with them. But actually you have to be the person to allow the discomfort. And it takes extra work to help your kids learn how to lose and learn how to go through hardship. But...

I think it'll pay off. I don't know. It's the longest form of investing, right? They're under, as you said, they're young. So we won't know for 10. We know you did it well. Yours are older and they're great. I hope it works. I hope we're doing the right things. You are. I have a feeling 35 years from now, somebody will be interviewing your daughter and she'll say the same thing about being raised by a great family, great close-knit family. I have a feeling. All right. So we like to end these things with a lightning round. So I'm going to run through a couple of questions. Just get a quick answer from you.

So what was your very first investment? Disney stock, which I was given for my first communion. And that was the first time I said, well, what is this? And I was explained what it meant to own part of a company. That's awesome.

You spent a lot of time interviewing great investors on this very podcast in addition to being one yourself. What would you say are the most important traits of being a great investor? The two most important traits are discipline, execution of philosophy and process regardless of the environment that allows people to execute, particularly in environments like this. And the second is time.

So you've made mistakes, try and make new ones, and you have pattern recognition. And the interesting thing about both of those are they're impossible to replicate. They just, they really are. They're actually pretty formidable competitive advantages. If you can find investors that are time-tested and have excellent discipline of philosophy and process, you're on to something advantageous. So what's the best piece of advice you've ever received?

My dad used to say to me, you know, be yourself. Everybody else is taken. It's probably a quip he stole from someone else. I like that. That's a good one. It is good. It's authenticity. And now that's more popular to be authentic. Right. But you've done this longer than me. I kind of sometimes, especially being the only way this is the lightning round. Exactly. That wasn't very short, but that's OK. But I like it. I'll leave that there. Be yourself.

Be yourself because everyone else is taken. Everybody else is taken and just be authentic. And I think that's a very popular form of leadership now, but it was something I cultivated early because I was encouraged to do that. So which investor do you admire most? I'm going to say our TCW investors. And I said people with a lot of experience and extreme discipline. So I'm going to say Rick Miller, who runs private credit for us, and Brian Whalen, who's our CIO of fixed income. I admire them greatly.

So where do you spend most of your time outside of the office apart from being a mom to these four amazing children? I think that's it. That's all I do. You sleep. You sleep. No, but I do every, when I'm not doing the work, I try and be with the kids a lot, but I'm starting to play golf.

That's interesting. I don't want anyone looking up my index because like I don't have one. I just started. But I am I'm getting out on the course more with my husband and with the kids. And that's my goal. That's great. That's my goal is to be a bogey golfer. Wow. Also lets my kids see me be really bad at something. So right. Going back to having the persistence to work through. But I am I am trying. And L.A. is a great place to do that because the weather is great all year round. Yep. Seventy five and sunny. Yeah. Yep.

And finally, what are you most excited about in the world right now? The uncertainty and the volatility. Amazing. This is our market. There's so many ways to add value for clients. And so this is actually, I think, just an extraordinary time to be in the business that I'm in.

So, Katie, thank you so much for joining me on this podcast. It was so much fun. It's a pleasure to have you back at Goldman Sachs and to spend this time with you. Thank you all for listening to this episode of Goldman Sachs Exchange's Great Investors, which was recorded on Tuesday, April 22nd, 2025. I'm Alison Mass. And if you enjoyed the show, we hope you'll follow us on Apple Podcasts, Spotify, or YouTube, or wherever you listen to your podcasts, and leave us a rating and a comment.

The opinions and views expressed in this program may not necessarily reflect the institutional views of Goldman Sachs or its affiliates. This program should not be copied, distributed, published, or reproduced in whole or in part, or disclosed by any recipient to any other person without the express written consent of Goldman Sachs.

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